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Morgan Stanley expects another period of softness for crude ahead, Brent to fall into the mid-high USD 50/bbl region for the majority of 2026. Expect the market to be in a "significant" surplus before then returning to balance in H2-2027.

Morgan Stanley's outlook suggests a persistent downturn for crude prices, predicting Brent crude to drop into the mid-high $50 per barrel range throughout 2026.

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Morgan Stanley expects another period of softness for crude ahead, Brent to fall into the mid-high USD 50/bbl region for the majority of 2026. Expect the market to be in a "significant" surplus before then returning to balance in H2-2027.

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This anticipated significant surplus indicates weakened demand or oversupply conditions that could affect inflation expectations, particularly in energy-linked currencies, until a balance is projected in the latter half of 2027.

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